Question

Calculate the times interest earned ratio for LaTonya’s Flop Shops, Inc., using the following information. Sales are $1.5 million, cost of goods sold is $600,000, depreciation expense is $150,000, other operating expenses are $300,000, addition to retained earnings is $146,250, dividends per share is $1, tax rate is 30 percent, and number of shares of common stock outstanding is 90,000. LaTonaya’s Flop Shops has no preferred stock outstanding.